To continue a Mareva injunction pending an appeal, an appellant must show that (i) it has a good arguable appeal (as opposed to a good arguable case); and (ii) there was a real risk of dissipation in the current circumstances. However, the question then arises, what is the difference between a good arguable case and a good arguable appeal?
In this landmark decision, the
Facts
Between 2015 and 2017, the appellant,
JTA commenced a lawsuit in
Pending the trial in
JTA's claim was subsequently dismissed at trial and the Mareva injunction was discharged as a result. JTA appealed and applied for the Mareva injunction to be continued pending the appeal. The application was dismissed by the trial judge, and JTA made a further application to the
The Singapore Courts' two-pronged test for grant of Mareva relief pending appeal
It was common ground between the parties that JTA had to establish that (i) it had a good arguable appeal (as opposed to good arguable case) and (ii) there was a real risk of dissipation of assets under the circumstances. However, what does it mean for an applicant to have a "good arguable appeal"?
Understanding what it means by a "good arguable appeal" in
It is trite that a good arguable case is one which is more than barely capable of serious argument, but not necessarily one which a judge considers would have a better than 50% chance of success (see e.g. Bouvier,
The English position has generally been that the test for a good arguable appeal would "likely to be a more difficult test to satisfy" than a good arguable case and "if the case turns upon questions of fact which the judge has resolved against the plaintiff, [it] may well be insuperable" [emphasis added] (see
MK and GLH relied on the decision of Ketchum, to assert that an applicant would need to show that it had a more than 50% chance of success in the appeal to establish a good arguable appeal.
So what is the
In this regard, the
- Findings of fact against the plaintiff made by the trial judge - the threshold for appellate intervention is high as it must be shown that the trial judge's assessment was "plainly wrong or against the weight of the evidence" (see
Sandz Solutions (Singapore) Pte Ltd and others vStrategic Worldwide Assets Ltd and others [2014] 3 SLR 562 ("Sandz Solutions" at [37]); and - Evidence which had or had not been proved at trial - the
Court of Appeal when considering the good arguable appeal threshold should rely on evidence which was proved at the trial, it cannot rely on unproven evidence (unlike an interlocutory injunction pending trial which can be supported by evidence without formal proof).
Real risk of dissipation
It was also common ground amongst parties that the test of real risk of dissipation is essentially the same as that applicable to pre-trial, save that the appellate court should evaluate the risk by reference to current circumstances following the conclusion of the trial, though past events may be relevant if they serve to demonstrate the current risk of dissipation (see JTrust at [39]). The overarching test is whether there is objectively a real risk that a judgment may go unsatisfied because of a risk of unjustified dealing with assets (see JTrust at [40]).
The Court of Appeal's application of the principles to the facts
The Court of Appeal ultimately decided that the Mareva injunction ought to be preserved against MK and GLH pending the determination of JTA's appeal, but lifted as against CP.
Good arguable appeal: Findings of fact were not resolved against JTA / Evidence in JTA's favour
In its decision, the
With regard to the findings and inferences made by the trial judge, the
- that the trial judge's finding that GLH's financial statements were not prepared with the requisite dishonest intention was against the weight of the evidence before the court (see JTrust at [45] to [50]);
- that JTA had relied on both MK's representations of the current and expected profitability of GL Thailand (see JTrust at [51] to [56]);
- that the trial judge had drawn the wrong inferences in deciding that fraud was not established, particularly given that the trial judge had found that the loans were "undoubtedly unusual" and "suspicious (see JTrust at [57] to [64]); and
- that the acceptance of MK's and GLH's "goodwill" defence was premised on a wrong inference without any evidential basis (see JTrust at [65] to [69]).
The Court of Appeal also identified documentary evidence of round-tripping of funds back to GL Thailand which did not appear to have been considered by the trial judge (see JTrust at [70] to [79).
Real risk of dissipation: No contrary findings were made
In JTrust (CA), the
As the
- Adverse remarks made against MK by the
Eastern Caribbean Supreme Court in related BVI proceedings; and - evidence that GLH had attempted to transfer money to GL Thailand, without informing JTA as required by the worldwide Mareva injunction.
As for CP, the
Accordingly, the Mareva injunction was reinstated against MK and GLH, but lifted as against CP.
Conclusion
The Court of Appeal's clarification between the good arguable case and good arguable appeal thresholds is a welcome development to
First, an unsuccessful plaintiff should carefully review the first instance judgment and consider whether the judgment suffers from (i) pure errors of fact or (ii) errors of law or wrongly drawn inferences. The former presents an almost insuperable obstacle for applications to reinstate the Mareva injunction, as the applicant must show that the findings of fact were "plainly wrong or against the weight of the evidence".
Second, an application to reinstate the Mareva injunction will typically require sufficient evidence of a real risk of dissipation in the present circumstances. Past evidence is only relevant insofar as it supports the present risk of dissipation. Unsuccessful plaintiffs at the first instance should remain vigilant and ensure that any attempts to dissipate assets are promptly brought to the Court's attention.
Originally published
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